Real estate demand in Saudi Arabia's two holy cities hits $2bn

Arab News

22-04-2025

RIYADH: Saudi Arabia's real estate sector continues to draw international attention, with high-net-worth individuals from nine Muslim-majority countries preparing to commit $2 billion toward property purchases in Makkah and Madinah, according to a new survey.
The findings, part of Knight Frank's latest Private Capital Report, show that 84 percent of global HNWIs surveyed expressed interest in acquiring property in Saudi Arabia — with a clear preference for its two holy cities.
Nearly half, or 48 percent, of those respondents said they plan to use homes in Makkah as their main residence, pointing to a shift toward long-term occupancy rather than seasonal or purely investment-driven holdings.
The trend comes as Saudi Arabia overhauls its property sector to position itself as a global tourism and business hub by the decade's end, in line with its Vision 2030 diversification strategy.
Faisal Durrani, partner and head of research for the Middle East and North Africa at Knight Frank, said: 'The region's sustained economic growth, underpinned by ambitious national visions and strategic policy reforms, has reinforced its position as a global investment hub.'
Durrani added that real estate remains a preferred investment vehicle for ultra-high-net-worth individuals seeking to preserve wealth. 'Across the MENA region, demand for prime and super-prime homes has reached unprecedented levels, fueled by both local and international buyers seeking security, stability and long-term growth,' he said.
Earlier this month, S&P Global said the outlook for Saudi Arabia's property sector remains positive in the near term, driven by population growth, rising tourism, and Vision 2030-led initiatives. The Real Estate General Authority projects the market to reach $101.62 billion by 2029, with a compound annual growth rate of 8 percent starting in 2024.
UAE draws global wealth
Regionally, the UAE continues to attract high-net-worth migration. Knight Frank noted that 7,200 millionaires relocated to the country in 2024, boosting its total resident population of affluent individuals to 134,000.
The report also found the number of dollar millionaires in the UAE stood at 130,500 as of December 2024, ranking it the 14th largest wealth market globally. The emirates also host 325 centi-millionaires — those with liquid wealth exceeding $100 million — and 28 billionaires.
According to Knight Frank, 31 percent of the millionaires who moved to the UAE over the past decade came from India, followed by 20 percent from the Middle East and 14 percent from Russia and the Commonwealth of Independent States.
'With a record-breaking 142,000 millionaires forecast to change their domicile globally in 2025, the UAE stands poised to capture a significant share of this wealth migration wave, strengthening its status as a wealth hub that has successfully transitioned from regional player to global force,' said Dominic Volek, group head of private clients at Henley & Partners, in a statement.
Luxury sales surge in Dubai
Wealth migration is translating into a property boom in Dubai, now the world's most active market for $10 million-plus home sales for two consecutive years, ahead of London and New York.
In 2024, the city recorded 435 ultra-luxury home transactions, compared to 434 the previous year. A record 153 such deals were closed in the fourth quarter of 2024 alone, while the first quarter of 2025 saw another 111, up 5.7 percent from the same period last year.
'Dubai's luxury residential market continues to defy gravity. Demand, particularly from international buyers, remains unrivaled on the global stage,' said Durrani. 'In 2024 alone, Dubai not only led the world in the number of $10 million-plus home sales, but also topped total transaction value, with 435 deals worth $7.1 billion.'
'Dubai has firmly established itself as the global epicenter for ultra-luxury real estate – surpassing legacy markets like New York, London and Hong Kong. It's a staggering achievement for a market that, until recently, was considered relatively young,' he added.
Palm Jumeirah retained its position as Dubai's premier ultra-prime location, recording 34 transactions worth more than $10 million in the first quarter of 2025, with a combined value of $562.8 million.
Emirates Hills followed, with 15 deals totaling $356.7 million.
'Dubai has cemented its position as a premier destination for HNWI seeking real estate for personal use or for investment purposes, with a distinct focus by the global elite on making the city a permanent base or a second home,' said Nicholas Spencer, Knight Frank's partner- Private Capital and Family Enterprises, MENA.
Broader MENA trends
In the wider region, Knight Frank said Qatar's residential market is also drawing interest from GCC nationals and GCC-based expatriates.
The firm identified $537.5 million in private capital globally that is actively seeking residential real estate in Qatar.
Meanwhile, Egypt's real estate market remains a key area of interest for GCC investors.
'GCC investors' interest in Egypt's second homes market underscores the country's appeal as a prime real estate destination. The combination of lifestyle benefits, potential for high rental yields, affordability and strong strategic ties to the GCC all add to the country's allure,' added Knight Frank.